Oil Price

I exited long positions in the oil sector earlier in the year at $110 bl. In an Aug. 7 post, I put oil
back on my long side trades list, hoping to get back into oil between $70 -80. Yeah, well there
were a couple of evening NYMEX session prints at $70, but I caught it pretty well. In fact, the
oil price has recovered far better than I had hoped, and another exit may be due soon with oil up
toward $94.50 (Oil price chart).

Oil is getting moderately overbought short term, but I am also concerned that it is having a very
unseasonably strong run, since the price of oil historically has weakened over the final 10 weeks
of the fourth quarter as gasoline demand slips and as heating oil production has been ramped up.
The Saudis may want to reduce production to end the Libyan oil shortfall "patch" as Libya slowly
returns to its lifeblood industry in the wake of the revolution. Lots of angles here, but I am least
comfortable with the power of the run up in the oil price when it should be falling on seasonally
weak demand in a global economy that is running rather slow.